Oral Arguments Held In Microsoft Word Patent Case

WASHINGTON, D.C. - (Mealey's) The evidentiary standard for proving patent invalidity was debated April 18 before the U.S. Supreme Court in a dispute involving the popular word-processing software program Microsoft Word (Microsoft Corp. v. i4i Limited Partnership and Infrastructure for Information Inc., No. 10-290, U.S. Sup.).

Attorney Thomas G. Hungar of Gibson, Dunn & Crutcher, representing petitioner Microsoft Corp., argued that a March 2010 ruling by the Federal Circuit U.S. Court of Appeals - which required the software giant to invalidate a patent by "clear and convincing" evidence - is erroneous.

Arguing on behalf of respondent i4i Limited Partnership and Infrastructure for Information Inc., attorney Seth P. Waxman of Wilmer Cutler Pickering Hale and Dorr instead urged the high court to affirm the Federal Circuit. According to Waxman, Congress has been presented with ample opportunities to amend the statute to reflect the evidentiary standard advanced by Microsoft yet has done "nothing whatsoever to change it." To that end, Waxman suggested that Congress' "active acquiescence" is akin to an endorsement of the clear and convincing standard.

"The long-settled, clear and convincing evidence standard is correct, one, as a matter of statutory interpretation, two, as a matter of stare decisis in a field in which stability is particularly important, and, three, as a matter of first principles," Waxman argued.

The instant suit was filed in 2007 in the U.S. District Court for the Eastern District of Texas. At issue is i4i's U.S. Patent No. 5,787,449, which covers an improved method for editing custom extensible markup language (XML) for computer text. A jury found in favor of i4i, awarding the patent holding firm $200 million in damages in May 2009. The District Court rejected Microsoft's request for judgment as a matter of law, enhancing the total award to $240 million on grounds of willfulness, leading Microsoft to appeal to the Federal Circuit.

Although the appellate panel initially stayed the injunction, in December 2009 it affirmed the infringement finding as well as the District Court's damages award and injunction, which prohibits Microsoft from selling or using any infringing Word products with the capability of opening XML files containing custom XML. The Federal Circuit revised its decision in March 2010 but upheld the finding of willfulness. A petition for rehearing en banc was later denied, and Microsoft sought certiorari, which was granted in November.

The question presented for review is whether the Federal Circuit erred in holding that Microsoft's invalidity defense must be proven by clear and convincing evidence, even though the prior art on which the invalidity defense rests was not considered by the U.S. Patent and Trademark Office prior to the issuance of the '449 patent.

Chief Justice John G. Roberts took no part in the consideration of Microsoft's petition and did not participate at oral arguments.

[Editor's Note: Full coverage will be in the May 2 issue of Mealey's Litigation Report: Intellectual Property. In the meantime, the transcript is available at www.mealeysonline.comor by calling the Customer Support Department at 1-800-833-9844. Document #16-110502-003T. For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]